Written evidence from Halton Housing Trust (UCU0064)
Further to the evidence presented at the Select Committee Hearing on 23rd January 2017 and our subsequent follow up letter and supporting information dated 25th January 2017, the Trust welcomes the opportunity to make a further submission to the Committee’s open call for evidence.
As a brief reminder, the Full Universal Credit (UC) Service has been introduced across Halton since 27th July 2016. Prior to this the Live Service had been operating since November 2014.
We have tried to avoid any repetition from our earlier submission and have based our submission around the questions posed by the Committee.
How long are people waiting for their Universal Credit claim to be processed, and what impact is this having on them?
The time cases are taking and the impact upon claimants is varied. There are cases where the UC is being processed within reasonable timescales. However, for a significant number of cases this is not happening. This is leading to claimants experiencing financial hardship, as well as in some cases this also having a detrimental impact upon their health and wellbeing.
The Trust’s specialist Welfare Benefits Team is currently providing support to 35% of all claimants on the Live Service. Examples of the issues they are experiencing include:
How are claimants managing with being paid Universal Credit monthly in arrears?
There is clear evidence that customers are struggling with their UC being paid in arrears. This is because their previous employment is often based upon weekly or fortnightly payments. This in turn means they have been unable to build up sufficient savings to cover essential household expenditure until their first UC payment is received. This then results in them having to revert to loans, which are often repaid from their first UC payment, leading to a further period of financial hardship.
A significant number of claimants who are used to managing their money over a shorter period (usually weekly or fortnightly) are struggling to budget on a monthly cycle, especially when these payments are in arrears.
Has Universal Credit improved the accuracy of payments?
From our contact with claimants, there has been an improvement in the accuracy of payments made to claimants since our earlier submission to the Select Committee. Notwithstanding this, there are still areas of concern that are impacting on both the Trust as a landlord and claimants living in our homes.
For those claimants receiving UC as part of ‘in work’ benefits, there is concern over the accuracy of payments. This can be exacerbated by fluctuating income from work. This leads to the incorrect amount of UC being awarded, which is then recovered in subsequent months at the 40% maximum level. This is leading to claimants experiencing further difficulty in budgeting over this period and increased levels of financial hardship.
There have also been examples of errors in the payment of APAs to the Trust. In these cases, we have received notification that an APA will be paid direct to the landlord and confirmed with the claimant. The payment is not subsequently paid to the landlord. Instead it is paid direct to the claimant who then does not make the payment to the landlord as they are unaware this is meant to be towards their rent arrears. This is then leading to increased arrears and legal action, with the resultant costs and insecurity this raises for the claimant and their tenancy.
On a technical point, around how payments are made, DWP makes 12 monthly payments each year. However, the DWP schedule is produced on a four-weekly basis (13 per year). This means that on one of the schedules produced each year, the customer’s payment will not be included. It is unclear when this payment will be omitted. This leads to confusion as to whether it is a planned missed payment or the claim has been cancelled and/ or an APA has been suspended.
Have claimants reported making a new claim for Universal Credit, and then found that the system has not registered their claim correctly?
As the Trust is in a Full Service area, claimants whose claim was previously processed as part of the Live Service are now transferring to the Full Service. This transfer requires a new claim to be made rather than a transfer of information.
There have been cases where claimants have completed the online claim but they are subsequently being asked to attend an appointment at the JCP if the verification hasn't been completed online. This is despite the claim having been submitted.
What impact is Universal Credit having on rent arrears, what effect is this having on landlords and claimants, and how could the situation be improved?
Halton Housing Trust currently has 814 customers in receipt of Universal Credit. This represents 12% of our total number of customers. Of these, 579 are Full Service claimants.
The total amount of rent arrears outstanding to the Trust is £1,036,974. Of this amount, £404,434 is owed by customers in receipt of UC. This means that just 12% of our customers owe 38% of all our arrears.
For customers on the Full Service, 109 are currently in balance or credit in comparison with 179 prior to going on to UC. 73% (371 claimants) owe more than prior to them making a UC claim.
We are also seeing an increased risk of claimants who are unable to sustain their tenancy due to increased rent arrears. 24 claimants now owe over £1,000 more than before claiming UC, whilst over 80 owe more than £500.
An additional impact is the increase in possession cases for rent arrears. In the four-month period after the introduction in the Full Service there was a 50% increase in cases to 147 in comparison with the same time in the previous year.
For customers in arrears, they can be struggling financially due to the value of deductions being taken from their personal element. This is impacting upon their ability to pay the shortfall in rent and other housing costs, as well as previous court orders, putting their tenancy at risk.
In addition to the impact upon the level of debt we are now carrying as a landlord, the impact on the Trust’s staffing resources has been significant. We have seen an increase of more than 100% in customer contact to discuss arrears since the move to the Full Service.
Customers are now more likely to be in arrears and at a higher level. This is leading customers to make increased and regular contact with the Trust to discuss their rent account. There is also the added stress on the customer, of the Trust taking possession action to protect its income.
We have undertaken a review to ascertain the increase in the number and the potential impact of new UC cases in 2017/18. This has been based on our experience of the roll out so far and the associated payment patterns of those customers. Our prediction is that the number of UC cases will double by the end of 2017/18. This will have a major impact on our arrears levels.
The continued roll out will incorporate a significant increase in the number of complex UC cases in 2017/18 than has been experienced to date. The more complex cases will include those customers with disabilities whose awards will transfer from Employment and Support Allowance (ESA) to UC. There will be other changes implemented within the welfare system from April 2017, which will impact Under 21s, families with a third child and those who face the lower benefit cap.
To improve the current position, we would refer to the six previous recommendations from our letter dated 23rd January 2017. We maintain convinced that the implementation of these would substantially improve the rollout of the Full Service, through applying the learning from early rollout areas such as Halton:
Would certain groups benefit from greater payment process flexibility and, if so, what might the Government do to facilitate it?
There are some Trust customers who have identified difficulties in managing on a monthly budget and the housing element of UC. For these cases the ability to make more regular payments will assist in managing their UC claim.
The option for claimants to request payments direct to their landlord at the start of the claim, even if there are no arrears or an identified vulnerability, would support enhanced money management skills for more vulnerable claimants.
Does Universal Credit provide people in emergency temporary accommodation with the support they need, and how could this be improved?
We are unable to comment on this specific point as the Trust does not have any emergency accommodation. However, we would refer back to the verbal and written evidence submitted by Mark Fowler, Director of Gateway and Welfare at the London Borough of Croydon at the hearing on 23rd January 2017.
What impact is Universal Credit having on the income and costs of local authorities, housing associations, charities and other local organisations?
As part of the preparation for UC the Trust doubled the size of its Debt Recovery Team, with all the additional staffing costs this incurs. This was to prepare to collect up to 65% of our rental income, which had previously been paid direct to us via Housing Benefit.
In response to the evidence from our experience since July 2016, the Trust has increased its bad debt provision.
The introduction of UC has also driven the Trust’s Digital First approach, which seeks to enable those who can to self-serve, to free up resources to enable us to focus on those customers with more complex needs.
What impact has the introduction of Full Universal Credit service had in areas where it has replaced the Live Service?
Halton claimants on the Live Service are now transferring over to the Full Service. There is clear evidence of numerous cases where mistakes are being made as part of this transition. Our earlier submission to the Committee included more detail on this issue and these points remain valid. In addition to the points previously feedback to the Select Committee, there are several new emerging issues.
There have been problems with payment of rent on joint tenancies when there is a relationship breakdown. Issues arise when one member of a couple leaves the property but the tenancy is in joint names. When the claimant has made a UC claim in a sole name, the DWP have only paid half the rent. Unfortunately, the proposed solution from DWP of signing a new tenancy is not possible. The previous joint tenant is frequently unavailable or unwilling to assign the tenancy. As a legal document this cannot just be amended without the signed agreement of both parties.
In cases where claimants who are on an APA transfer to the Full Service there have been inconsistencies in how these payments are dealt with. In some cases, APA payments have been suspended, whist in others payment has continued.
Under the Full Service, the main form of contact has been via email using a dedicated email address. There are recent examples when attempts to send information via email have not been accepted. In these cases, the following message is received:
“The recipient's mailbox is full and can't accept messages now. Please try resending this message later, or contact the recipient directly.”
With the limitations on other forms of contact this means that vital information to process a claim is not received by DWP, leading to further delays in claims being processed.
Customers in Full Service areas are being left in financial hardship due to the system failing to make payments on time and for the correct amount.
The online journal is not fit for purpose. It relies completely on staff to respond to journal entries. Claimants are waiting months for journal entries to be read and responded to. We have requested details of the DWP service level agreements for responding to journals entries. Unfortunately, this information has not been forthcoming.
Full Service claimants are unable to contact anyone to resolve their issues. The local jobcentres are limited in what they can do as they have no control over payments. This is compounded by the service centre having lengthy on-hold waiting times, making calls for many people unaffordable.
Deductions are being taken from Full Service claimants without any warning or explanation what the deduction is for. The online account advises claimants to refer to the journal for further information, but no information is provided. Claimants do not know what debts they are repaying, how long payments will last or whether they actually even owe the debt. This makes it impossible for claimants to budget or manage their money.
Claimants are being awarded incorrect entitlements. This is particularly prevalent for those moving over from ESA to Full Service UC. These also tend to be the most vulnerable group of claimants, due to longstanding health issues.
ESA claimants who move over to UC solely for new housing costs and who have had no changes in their health, having already been assessed as unfit for work, are having full work commitments placed on them when they move to UC. The limited capability for work/related activity components are not being added to their UC claim. Furthermore, their ESA claims are not stopping, resulting in overpayments and civil penalties. This is despite it being due to administrative errors by DWP that the ESA claim has continued alongside UC payments.
Claimants who are submitting sick notes over a lengthy period are not being issued with an UC50 medical form to attend a medical examination. This is only triggered when specifically requested by the claimant. Claimants are only usually aware of this when they have sought advice from a support agency. There are then excessive waiting times for the form to be received.
This position is further compounded by an average 10 month wait for a medical assessment. This is despite the regulations stating that any additional component following a medical assessment should be added to the UC claim in the 3-monthly assessment following the issuing of the uC50 form.
UC has not replaced contribution based JSA or ESA. Despite this, claimants wanting to claim contribution based benefits are being advised by DWP that they cannot do this. This must be done through the UC online application, in turn having a knock-on impact upon claimant’s other legacy benefit claims.
Since January 2017 further restrictions have been placed on communication with the DWP and third parties. This standard email response is received in response to queries regarding housing costs for claimants.
“Thank you for your email. You’ve asked us to share confidential information with you. We’re unable to provide you with the information you requested.
Yours sincerely
Universal Credit team”
On a related matter the Committee may also be aware that Liverpool’s Welfare Reform Cumulative Impact Report Welfare Reform Cumulative Impact Report was published last week. While the content is specific to Liverpool, many of the findings are also relevant in Halton.
I hope the additional information contained within this letter is helpful to the Committee in reaching their conclusions. Should you require any additional information please do not hesitate to contact me direct.